Welfare Dons

It was a phrase designed to attack the very idea of government programs by suggesting that taxpayers all over the country were subsidizing people who were too lazy to work.

Well, in the current debate about health care reform, it may be time to coin a new phrase: Welfare Dons. They are the lazy, shiftless recipients of corporate welfare who have made America's health care system the most expensive and inefficient in the world. Let's take a look.

For some time, we have been told, in the words of Ronald Reagan, that government is not the solution; government is the problem. Private enterprise is good; government is bad.

But it's been getting confusing lately as free market fundamentalists, such as the Republican Michael Steele, have been touting the value of Medicare (a government program that happens to be popular), while denigrating government's ability to deliver good health care. There is a reason for this. In the eyes of most Republicans and some Blue Dog Democrats, Medicare is a $2.6 trillion-dollar piggy bank for the medical Welfare Dons: drug-producers, device-makers, medical conglomerates, insurance companies, and manufacturers of high-tech diagnostic equipment. By touting Medicare and denigrating government, the goal is to get government out of the business of protecting taxpayer dollars and hand over the keys to the Medicare piggy bank to corporations who want to be able to set high prices and mandate expensive procedures.

Don't believe me? Set the wayback machine to the passage of the Medicare Modernization Act, a bill that was literally written by lobbyists and passed by a determined Tom Delay and Billy Tauzin. (Yes, this is the same Billy Tauzin - another Welfare Don - who is now paid millions of dollars by Pharma and who was caught smiling - like a cat with a canary in its mouth - walking out of the Obama White house after saying he had cut a "deal" to keep government out of the business of forcing discounted prices.) In that bill, the federal government was prohibited from using its size and clout to negotiate with drug companies. Why? Well, that would have reduced profits and, oh yes, the cost of drugs. Instead, Medicare became a piggy bank that dispensed corporate welfare to Pharma in the form of high drug costs to US citizens. Yet Big Pharma doesn't really need our help; most of the big pharmaceutical firms take home profit margins of 16%.

But looting the public treasury for Pharma wasn't enough for the Welfare Dons. They also put in place a program for insurers called Medicare Advantage, a government hand-out of $16 billion (a trifle really) to compensate private insurers for the cost of offering Medicare to patients. In other words, the Welfare Dons took $16 billion from taxpayers to give to private insurers as a bonus for offering a government program! Then insurers hiked co-pays.

If you are a Welfare Don, how good is that! Now, just imagine how good it would be if you could keep taxpayer dollars flowing to Medicare but eliminate any barriers to how it is dispensed. What's that called? Killing the public option. Booyah!

The fact is that, in a mixed system where private enterprise and public monies inhabit the same space, inefficiency and extravagance are profitable. Remember the military industrial complex? Private contractors make profits by charging the government for cost overruns. Defense contractors call this "cost plus." Pharma calls it "No Public Option."

Why is it that free marketeers are so afraid of competing with a government program which, in their religion, is inherently inefficient? Well who wants to compete with a public option that won't take 10-20% in overhead, lobbying costs, administration costs and profit? That's my bonus, dude. Whoops, I mean, I have a fiduciary responsibility to deliver the highest possible return to my shareholders.

And who wants to compete with a public option that won't just pay whatever drug-makers or others charge, without inquiring into the quality of the service or the product? Here's where the insurance companies really fail us. They over-pay hospitals, specialists and drug companies and then raise premiums to cover the costs. Further, when they pay hospitals 115% of what it should cost to care for a patient they are paying for inefficiency that can be dangerous. My mother, for example, went to a hospital for a simple procedure and died from an infection she caught there.

In the case of drugs, the problems can be even more troubling. To get discounts on some drugs, private insurers are willing to pay top prices for blockbuster pharmaceuticals like Vioxx, despite the fact that Vioxx was rumored to cause fatal strokes and heart attacks. Contrast this with the Veterans Administration (a government program that is actually interested in the welfare of patients) and the Mayo Clinic (a non-profit that worries about patients, not shareholders), both of whom stopped covering Vioxx for most patients more than a year before the manufacturer, Merck, was finally forced to take the drug off the market. And who did the forcing? It was that old, arcane, inefficient outfit that still worries about the public welfare, the government.

Welfare moms were mocked for doing nothing. The Welfare Dons are sensitive to charges of doing nothing (denying care to sick people, or people with preexisting conditions) so they have a slightly different m.o.: do something, even if it isn't necessary. Insurance companies pay big bucks for procedures but next to nothing for patient consultations and preventive medicine, which is what most medicine is. That's why - with the exception of what Don Berwick, from the Institute for Healthcare Improvement, calls "rescue care" (emergency surgery, radical cancer treatments, etc) - our health care outcomes are significantly worse than other fully industrialized nations even though we spend much more. More Ka-Ching! for the Welfare Dons.

Of course, one big difference between welfare moms and Welfare Dons is that the WDs are very politically powerful. And why is that? Well, our current Senators and congresspeople now spend up to half their time raising money for increasingly expensive elections. And who can supply that money? Why it's the Welfare Dons. This is where things get really good for the Welfare Dons. They can publicly denigrate government and show their contempt for it by treating it as a commodity that can be bought and sold. And what does the government do in return? It gives the Welfare Dons a big fat welfare check.

In criminal justice, this is called a protection racket. After all, while the term "Don" means a person of great importance, it also means the head of a crime family or syndicate. That's Welfare Don Corleone.

"The Godfather" was one of lobbyist Jack Abramoff's favorite films. That's the subject of my next film, "Casino Jack (and the United States of Money)."

Alex Gibney is a documentary filmmaker who made Enron: The Smartest Guys in the Room. He has won an Emmy, a Peabody, the duPont Columbia Award, and a Grammy.
More

Alex Gibney is the writer, director and producer of the 2008 Oscar-winning documentary Taxi to the Dark Side, the Oscar-nominated film Enron: The Smartest Guys in the Room, and Gonzo: The Life and Work of Dr. Hunter S. Thompson, narrated by Johnny Depp. In post-production on My Trip to Al Qaeda, based on the play by Pulitzer Prize–winning author Lawrence Wright, Gibney is also filming a documentary on Lance Armstrong. Gibney served as executive producer for No End in Sight, which was also nominated for an Oscar; a producer for Herbie Hancock: Possibilities, a film about the jazz legend's collaboration with musical talents such as Santana, Sting, and Christina Aguilera; and consulting producer on Who Killed the Electric Car. Gibney's producing credits also include the classic concert film Lightning in a Bottle, directed by Antoine Fuqua; The Blues, an Emmy-nominated series of seven films in association with executive producer Martin Scorsese; and The Trials of Henry Kissinger. Gibney is the recipient of many awards including the Emmy, the Peabody, the duPont Columbia Award, and the Grammy.